Real estate fuels huge jump in Blackstone’s profit

January 30, 2014 12:00PM

Blackstone Group ended its tremendous 2013 with a strong showing in the fourth quarter, mostly on the strength of gain in its real estate portfolio. Blackstone’s fourth-quarter profit was $621.3 million, a greater than five-fold increase from $106.4 million in the fourth quarter of 2012, according to its latest earnings report.

Blackstone’s real estate group, headed by Jonathan Gray, reported a 13.1 percent increase in the value of its real estate funds, according to the report, released yesterday. Blackstone sold a chunk of office properties in both the United States and the United Kingdom, and reaped big rewards from taking its hotel chain Hilton Worldwide Holdings public in December, according to the Wall Street Journal. Still, Blackstone is the biggest single-family landlord in the U.S. at the moment, published reports show.

Sources recently told The Real Deal that Gray’s real estate division was responsible for about 60 percent of the private equity firm’s profits. Gray reportedly became a billionaire himself last year.

Just yesterday, the second-largest U.S. landlord, American Homes 4 Rent, tapped Goldman Sachs to arrange the sale of bonds backed by rental home payments, mimicking Blackstone’s decision last year to market similarly-styled securities. [WSJ]  – Hiten Samtani